S&T Bancorp (NASDAQ:STBA) executives highlighted full-year 2025 performance, fourth-quarter trends, and early 2026 expectations during the company’s earnings call led by CEO Chris McComish, President Dave Antolik, and CFO Mark Kochvar.
2025 results and fourth-quarter performance
McComish said the company “moved forward through 2025 very well,” citing strong returns, record capital levels, and external recognition for financial performance and employee engagement. For full-year 2025, management reported earnings of $3.49 per share and “just under $135 million” of net income, along with a net interest margin (NIM) of 3.9%.
For the fourth quarter, the company posted net income of $34 million, or $0.89 per share, which McComish said was slightly lower than the third quarter. He pointed to a return on assets (ROA) of 1.37%. NIM rose to 3.99%, up six basis points linked-quarter, and pre-provision net revenue (PPNR) improved to 1.95%, also up six basis points from the prior quarter.
Loan and deposit growth drivers
Antolik said fourth-quarter loan growth was “just under $100 million” (4.5%) and was driven primarily by commercial banking. He broke the quarterly change down as follows:
- C&I balances increased $53 million, driven by higher revolving balances and new customer acquisitions. Antolik said the asset-based lending group onboarded several new relationships, and cited retail, utilities, and service as contributing categories.
- CRE balances rose $34 million, entirely tied to construction funding. Management said demand continued for multifamily, warehouse, storage, and industrial projects, which typically fund over 12–18 months before moving to permanent financing and often to non-recourse funding sources.
Antolik said unused commercial construction commitments increased $78 million quarter over quarter, supporting growth in coming quarters. He added that pipelines dipped slightly entering the first quarter due to strong fourth-quarter funding, with the team focused on rebuilding pipeline levels.
On deposits, McComish said customer deposit growth was “just under $60 million” (2.9%) in the quarter, and noted that demand deposits represented 27% of total balances. In Q&A, Antolik said fourth-quarter customer deposit growth was particularly strong in the consumer segment, though it was offset by activity among “some large commercial depositors” that management viewed as more anomalous.
Credit quality: higher charge-offs tied to resolutions, but criticized/classified loans fell
Antolik described fourth-quarter asset quality as mixed. The ACL as a percentage of gross loans declined from 1.23% to 1.15% quarter over quarter, which he attributed to two factors: reduced specific reserves tied to problem loan resolutions, and a $30 million (13%) reduction in criticized and classified (C&C) loans during the quarter.
Antolik said the year-end 2025 reduction in criticized and classified loans marked the third consecutive year of improvement, and that total C&C loans have been reduced by 50% over the last three years.
He said the company fully resolved $29 million of loans during the quarter, contributing to $11 million of charge-offs (54 basis points annualized). In response to an analyst question, Antolik said these resolutions were directly related to “the two CRE and one C&I credit” that had been identified previously.
Non-performing assets increased by $6 million, rising from 62 to 69 basis points due to new non-performing loan formations in both C&I and CRE. Antolik said the company had “appropriately reserved” for these loans and had resolution strategies in place, adding that the level remained “very manageable.” Looking ahead, management expects 2026 asset quality to look similar to 2025, with continued focus on lowering non-performing loans and maintaining reduced criticized/classified balances.
Margin outlook, fees, and expense expectations
Kochvar said fourth-quarter net interest income increased $1.8 million, or just under 2%, from the third quarter, primarily reflecting the six-basis-point margin expansion. He attributed the NIM improvement to an 11 basis point decrease in the cost of funds, partially offset by a roughly three-basis-point decline in earning asset yields.
Management said it reduced exception and regular rates on non-maturity deposits as the Federal Reserve lowered short-term rates, while CD rates were “more sticky” but still declining. Kochvar said the company expects its “more neutral interest rate risk position and pricing discipline” to mitigate the impact of rate cuts, with tailwinds from maturing receive-fixed swaps, securities, fixed-loan repricing, and some CD repricing. For 2026, the company expects NIM stability in the “mid to high 3.9% range,” with net interest income growth driven by earning asset growth.
Non-interest income increased by $500,000 in the fourth quarter, with “small improvements” across major customer fee categories and a timing-related increase in other income tied to letter-of-credit activity. Kochvar said the company’s expectation for 2026 fees is approximately $13 million to $14 million per quarter.
Expenses rose about $800,000 from the third quarter, largely due to higher salaries and benefits, including medical costs and hiring activity. Marketing expenses were affected by the timing of promotions. Kochvar said the company expects to manage 2026 non-interest expense growth to around 3% year over year, implying a quarterly run rate of approximately $58 million. In Q&A, management said efficiency ratio expectations remain in the mid-50s, and that staffing growth over the next several years is expected to be “mostly production-related” rather than additional infrastructure build.
Capital, buybacks, and M&A comments
McComish also highlighted a new $100 million share repurchase authorization approved by the board. Kochvar said tangible common equity (TCE) declined 29 basis points in the fourth quarter due to repurchases completed during the period. The company repurchased just over 948,000 shares at an average price of $38.20, totaling $36.2 million.
Kochvar said regulatory capital ratios remained “very strong” with significant excess capital, and added that even if the full $100 million authorization is completed, management is comfortable it will retain sufficient capital for both the operating environment and potential inorganic or organic growth opportunities.
On M&A, McComish said the company remains in “active dialogue across the geographies” and continues to prioritize the topic, while emphasizing execution on day-to-day controllables. He also said the repurchase authorization does not inhibit the company’s ability to pursue M&A.
During Q&A, management reiterated its view that mid-single-digit loan growth is achievable in 2026 while maintaining asset quality standards, with growth expected primarily from C&I and CRE, along with continued consumer home equity growth tied to deposit-franchise customers. Management also emphasized deposit gathering as a priority, noting that incentive plans reflect the importance of funding asset growth through core deposit franchise expansion.
About S&T Bancorp (NASDAQ:STBA)
S&T Bancorp, Inc is a bank holding company headquartered in Indiana, Pennsylvania, serving as the parent of S&T Bank. Established as a banking organization in 1902 with the holding company formation following in the early 1980s, S&T Bancorp has built its reputation on delivering community-oriented financial services. The company operates under the NASDAQ ticker STBA, maintaining a focus on personalized banking solutions and local decision-making.
The company’s main business activities encompass a full suite of retail and commercial banking products.
